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Understanding Car Financing for Small Business Owners

Written by Shaun McTaggart

If you are self-employed, or the owner of a small business, you might be in the market for a vehicle for business purposes. Business owners who wish to purchase such a vehicle can take advantage of a no doc car loan, or a low doc car loan.

A low doc car loan, or no doc car loan, ensures that business owners and individuals who are self-employed have access to the transportation they need in order to conduct business. You can secure a no doc car loan without having to deal with the hassle of putting together and submitting documents related to your business. A low doc car loan is relatively similar to a no doc car loan but does require that you provide your lender with a few key documents (below) related to your business, and is usually the case when we are dealing with a startup business with a new ABN.

The requirements for no doc car loans and low doc car loans are explored below.

You must be a holder of an Australian Business Number (ABN).

For a No Doc Car Loan you must have held your ABN for at least 12 months. If you only recently started your business, you will likely need a Low doc car loan, in which you will need to supply some other paperwork such as below.

  • 3 Months Business Bank statements
  • Work Source Letter or contract if available

You must be self-employed.

Low doc car loans and no doc car loans were created with self-employed individuals and small business owners in mind. These loans help to promote the growth of businesses throughout Australia by ensuring that business owners have access to the transportation they need.

In some cases, you may be required to complete Goods and Services Tax (GST) registration.

The requirement to register for GST is dependent on the value of the financing you receive for your new car. This can vary on a case-by-case basis, so it is important to be sure to remember that this may be a factor you will need to consider when acquiring a no doc car loan or a low doc car loan for your small business.

You may be exempt from providing a deposit.

Property owners do not need to provide a deposit. Individuals who do not own property are only required to provide a deposit of 10 to 20 percent. However, customers who have previously owned a vehicle may be eligible to arrange to receive financing with no deposit.

Being on the title of one of the following property types will ensure your exemption from providing a deposit for your low doc car loan:

  • A family home
  • An investment property
  • A block of land
  • A commercial property

You are not required to provide copies of your tax returns.

If you are financing a car for a value that is less than $150,000, you are not required to provide copies of your tax returns. You are also exempt from providing copies of your tax returns if you are looking for truck finance for less than $250,000.

So what can you do? The best course of action is to seek out a vehicle financing service that exclusively deals with small business owners and people who are self-employed. This will ensure a high level of attention and service that is tailored to your needs.

“The opinions expressed by BizWitty Contributors are their own, not those of BizCover and should not be relied upon in place of appropriate professional advice. Please read our full disclaimer."

About the author

Shaun McTaggart

Shaun McTaggart has more than 17 years’ experience is the finance industry beginning with a 10 years stint as CEO of Aussie-Mortgages before selling this business and moving into the fast paced world of car and equipment finance via his online finance company Carfund only deals with business owners and our niche is that we do not require tax returns for our car, truck and equipment finance products.